OMAHA, Neb. — Berkshire Hathaway Inc. said Friday its fourth-quarter profit fell almost 18 percent as its companies linked to construction were hurt by nationwide housing woes, and the company generated smaller insurance underwriting profits and investment gains.
But the full-year picture CEO Warren Buffett described in his annual letter to shareholders appeared much brighter. The company’s net income soared 20 percent as it took on more derivative risk.
Berkshire reported earning $2.95 billion, or $1,904 per share, in the quarter. That’s down from $3.58 billion, or $2,323 per share, in the year-earlier period.
For 2007, Berkshire earned $13.2 billion, or $8,548 per share, up 20 percent from $11.02 billion, or $7,144 per share, the prior year.
On average, the four analysts surveyed by Thomson Financial have been expecting fourth-quarter earnings per share of $1,606 and annual earnings per share of $6,321.
Berkshire generated revenue of $118.2 billion in 2007, up from $98.5 billion in the previous year.
Buffett said Berkshire gained $12.3 billion in net worth during 2007, which represents an 11 percent increase in the per-share book value of the company. That beat the 5.5 percent gain in the S&P 500’s value over the same period.
On succession, Buffett said his company is well prepared to replace him whenever he’s no longer able to run Berkshire. But the 77-year-old Buffett did not offer many new details about the company’s plan.
To replace Buffett, Berkshire plans to split his CEO job into two parts: chief executive officer and chief investment officer.
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